Notice Regarding Reorganization of Renesas' Design and Development Systems through Corporate Separation and Merger of Consolidated Subsidiaries

28 Jan 2015

TOKYO, Japan, January 28, 2015 — Renesas Electronics Corporation (TSE: 6723, “Renesas Electronics”), a premier provider of advanced semiconductor solutions, today announced that, under the approval of Renesas Electronics' Board of Directors, it will reorganize its design and development functions by means of corporate separations affecting Renesas Electronics and its consolidated subsidiaries and a merger of consolidated subsidiaries as part of the reorganization of design and development functions within the Renesas Group (the “Renesas Group reorganization”) announced in the press release “Renesas Electronics Announces Reorganization Aimed at Strengthening of Design and Development Systems,” dated July 9, 2014.

Note that some details are omitted from the information disclosed below because the parties affected by the Renesas Group reorganization are Renesas Electronics and its wholly-owned subsidiaries.

1. Objectives of the Renesas Group reorganization

As announced in the press release “Renesas Electronics Announces Reorganization Aimed at Strengthening of Design and Development Systems,” dated July 9, 2014, the functions of the design and development units of Renesas Electronics, and of the three Renesas Group companies in Japan engaged in design, development, and applied technology—Renesas Solutions Corporation (“Renesas Solutions”), Renesas System Design Co., Ltd. (“Renesas System Design”), and Renesas Engineering Services Co., Ltd. (“Renesas Engineering Services”)—have been redefined, and their structures were reorganized accordingly (the “structural reorganization”) on August 1, 2014. 

 

The Renesas Group reorganization scheduled to take effect on April 1, 2015, will include a comprehensive transfer of assets, liabilities, personnel, agreements, etc., associated with the above structural reorganization.

 

2. Outline of the Renesas Group reorganization

2-1. Absorption-type separation of part of the development functions of Renesas Electronics by subsidiary

Effective April 1, 2015, the device solution development functions of Renesas Electronics will be transferred to Renesas Solutions using the corporate separation method.

 

2-1-1. Summary of corporate separation

 

2-1-1-1. Schedule of corporate separation

① Conclusion of agreement

January 28, 2015

② Date of separation (effective date)

April 1, 2015 (planned)

(Note) Renesas Electronics will follow the procedure for a simple corporate separation that will be executed without the requirement of the approval of Renesas' shareholders' meeting pursuant to Article 784, §3 of the Companies Act of Japan.

 

2-1-1-2. Method of corporate separation

Simple absorption-type separation with Renesas Electronics as transferor and Renesas Solutions as successor.

 

2-1-1-3. Allocations associated with corporate separation

No allocations of stock, funds, etc., are associated with this corporate separation.

 

2-1-1-4. Reduction in capital, etc., resulting from corporate separation

There will be no reduction in capital, etc., resulting from corporate separation.

 

2-1-1-5. Share subscription rights and bonds with share subscription rights

The transferor has not issued share subscription rights or bonds with share subscription rights.

 

2-1-1-6. Rights and obligations transferred to the successor company

Renesas Solutions will succeed from Renesas Electronics assets, liabilities, contractual standing, and other rights and obligations pertaining to the business activities covered by the separation.

 

2-1-1-7. Ability to fulfill obligations

Renesas Electronics concludes that following the corporate separation, Renesas Electronics and the successor company will have the ability to fulfill all the debt obligations for which they are responsible.

 

2-1-2. Overview of parties to corporate separation (as of September 30, 2014)

  Successor Transferor
① Company Name Renesas Solutions Corporation Renesas Electronics Corporation
② Major Operations 1. Operations related to applied semiconductor technology
(1) Development of total solutions
(2) Technical support activities
(3) Provision of systems business
2. Development, design, and production of software development tools
3. Technical training, Web information services
Research, development, design, manufacture, sale, and servicing of semiconductor products
③ Established April 2, 2001 November 1, 2002 (started operation on April 1, 2010)
④ Head Office Address Nippon Building, 2-6-2 Ote-machi, Chiyoda-ku, Tokyo 100-0004 1753 Shimonumabe, Nakahara-ku, Kawasaki, Kanagawa Pref. 211-8668
⑤ Representative Shinji Suda, President (part-time) Hisao Sakuta, Representative Director, Chairman and CEO
Tetsuya Tsurumaru, Representative Director, President and COO
⑥ Capital 300 million yen 228,300 million yen
⑦ Shares Issued 6,000 1,667,121,942 (excluding 2,548 shares of reacquired stock)
⑧ Fiscal Term March 31 March 31
⑨ Major Stockholders and Ownership Ratios Renesas Electronics Corporation: 100% Innovation Network Corporation of Japan: 69.15%
Japan Trustee Services Bank, Ltd.: 8.11%
Hitachi, Ltd.: 7.66%
Mitsubishi Electric Corporation: 6.26%
Financial condition and business performance in immediately preceding fiscal year (fiscal year ended March 31, 2014)
  Net Assets 1,719 million yen 227,314 million yen
Total Assets 4,737 million yen 786,002 million yen
Net Assets per Share 286,455.49 yen 128.73 yen
Net Sales 12,685 million yen 833,011 million yen
Operating Income (Loss) 128 million yen 67,635 million yen
Ordinary Income (Loss) 141 million yen 58,625 million yen
Net Income (Loss) −66 million yen −5,291 million yen
Net Income (Loss) per Share −11,008.41 yen −5.07 yen

2-1-3. Overview of the business to be separated

 

2-1-3-1. Business activities of the business to be separated

Device design and development business related to semiconductor products

 

2-1-3-2. Financial results of the business to be separated

The business to be separated is a design and development unit which does not generate any sales directly from outside the company, thereby there is no information to report.

 

2-1-3-3. Assets and liabilities of the business to be separated

Total assets: 6,698 million yen (planned)

Total liabilities: 6,698 million yen (planned)

 

2-2. Absorption-type separation of part of the development functions of Renesas Electronics by subsidiary

Effective April 1, 2015, Renesas Electronics' development and technical support functions related to semiconductor products will be transferred to Renesas Engineering Services using the corporate separation method.

 

2-2-1. Summary of corporate separation

 

2-2-1-1. Schedule of corporate separation

 

① Conclusion of agreement

January 28, 2015

② Date of separation (effective date)

April 1, 2015 (planned)

(Note) Renesas Electronics will follow the procedure for a simple corporate separation that will be executed without the requirement of the approval of Renesas' shareholders' meeting pursuant Article 784, §3 of the Companies Act of Japan.

 

2-2-1-2. Method of corporate separation

Simple absorption-type separation with Renesas Electronics as transferor and Renesas Engineering Services as successor.

 

2-2-1-3. Allocations associated with corporate separation

No allocations of stock, funds, etc., are associated with this corporate separation.

 

2-2-1-4. Reduction in capital, etc., resulting from corporate separation

There will be no reduction in capital, etc., resulting from corporate separation.

 

2-2-1-5. Share subscription rights and bonds with share subscription rights

The transferor has not issued share subscription rights or bonds with share subscription rights.

 

2-2-1-6. Rights and obligations transferred to the successor company

Renesas Engineering Services will succeed from Renesas Electronics assets, liabilities, contractual standing, and other rights and obligations pertaining to the business activities covered by the separation.

 

2-2-1-7. Ability to fulfill obligations
Renesas Electronics concludes that following the corporate separation Renesas Electronics and the successor company will have the ability to fulfill all the debt obligations for which they are responsible.

 

2-2-2. Overview of parties to corporate separation

  Successor Transferor
① Company Name Renesas Engineering Services Co., Ltd. Renesas Electronics Corporation
② Major Operations Design support, quality assurance, evaluation analysis, development and operation of information systems, other support operations Research, development, design, manufacture, sale, and servicing of semiconductor products
③ Established April 1, 1998 November 1, 2002 (started operation on April 1, 2010)
④ Head Office Address 5-20-1, Josuihon-cho, Kodaira-shi, Tokyo 187-8588 1753 Shimonumabe, Nakahara-ku, Kawasaki, Kanagawa Pref. 211-8668
⑤ Representatives Hideaki Arima, President Hisao Sakuta, Representative Director, Chairman and CEO
Tetsuya Tsurumaru, Representative Director, President and COO
⑥ Capital 50 million yen 228,300 million yen
⑦ Shares Issued 500 1,667,121,942 (excluding 2,548 shares of reacquired stock)
⑧ Fiscal Term March 31 March 31
⑨ Major Stockholders and Ownership Ratios Renesas Electronics Corporation: 100% Innovation Network Corporation of Japan: 69.15%
Japan Trustee Services Bank, Ltd.: 8.11%
Hitachi, Ltd.: 7.66%
Mitsubishi Electric Corporation: 6.26%
Financial condition and business performance in immediately preceding fiscal year (fiscal year ended March 31, 2014)
  Net Assets 1,300,167,000 yen 227,314 million yen
Total Assets 2,692,770,000 yen 786,002 million yen
Net Assets per Share 2,600,334 yen 128.73 yen
Net Sales 5,497,265,000 yen 833,011 million yen
Operating Income (Loss) −68,193,000 yen 67,635 million yen
Ordinary Income (Loss) −56,036,000 yen 58,625 million yen
Net Income (Loss) −87,442,000 yen −5,291 million yen
Net Income (Loss) per Share −174,884.19 yen −5.07 yen

2-2-3. Overview of the business to be separated

 

2-2-3-1. Business activities of the business to be separated

Development and technical support business related to semiconductor products of Renesas Electronics

 

2-2-3-2. Financial results of the business to be separated

The business to be separated is a development and technical support unit which does not generate any sales directly from outside the company, thereby there is no information to report.

 

2-2-3-3. Assets and liabilities to be transferred to Renesas Electronics

Total assets: 1,458 million yen (planned)

Total liabilities: 1,458 million yen (planned)

 

2-3. Absorption-type separation of some development functions of subsidiary by Renesas Electronics

Effective April 1, 2015, Renesas Solutions' following functions related to semiconductor products will be transferred to Renesas Electronics using the corporate separation method: Kit, platform and system solutions development functions; Sales promotion infrastructure development and web content creation; and Training, and education functions.

 

2-3-1. Summary of corporate separation

 

2-3-1-1. Schedule of corporate separation

① Conclusion of agreement

January 28, 2015

② Date of separation (effective date)

April 1, 2015 (planned)

Note: Renesas Electronics will follow the procedure for a simple corporate separation that will be executed without the requirement of the approval of Renesas' shareholders' meeting pursuant to Article 796, §3 of the Companies Act of Japan.

 

2-3-1-2. Method of corporate separation

Simple absorption-type separation with Renesas Solutions as transferor and Renesas Electronics as successor.

 

2-3-1-3. Allocations associated with corporate separation

Renesas Electronics will pay 1 yen in compensation to Renesas Solutions.

 

2-3-1-4. Reduction in capital, etc., resulting from corporate separation

There will be no reduction in capital, etc., resulting from the corporate separation.

 

2-3-1-5. Share subscription rights and bonds with share subscription rights

The transferor has not issued share subscription rights or bonds with share subscription rights.

 

2-3-1-6. Rights and obligations transferred to Renesas Electronics

In principle, Renesas Electronics will succeed on the effective date of the separation the contracts directly related to the succeeded functions, and all rights and obligations pertaining to them. However, items specially stipulated in the corporate separation agreement are excluded from the above.

 

2-3-1-7. Ability to fulfill obligations

Renesas Electronics concludes that following the corporate separation Renesas Electronics and the transferor company will have the ability to fulfill all the debt obligations for which they are responsible.

2-3-2. Overview of parties to corporate separation

  Successor Transferor
① Company Name Renesas Electronics Corporation Renesas Solutions Corporation
② Major Operations Research, development, design, manufacture, sale, and servicing of semiconductor products 1. Operations related to applied semiconductor technology
(1) Development of total solutions
(2) Technical support activities
(3) Provision of systems business
2. Development, design, and production of software development tools
3. Technical training, Web information services
③ Established November 1, 2002 (started operation on April 1, 2010) April 2, 2001
④ Head Office Address 1753 Shimonumabe, Nakahara-ku, Kawasaki, Kanagawa Pref. 211-8668 Nippon Building, 2-6-2 Ote-machi, Chiyoda-ku, Tokyo 100-0004
⑤ Representatives Hisao Sakuta, Representative Director, Chairman and CEO
Tetsuya Tsurumaru, Representative Director, President and COO
Shinji Suda, President (part-time)
⑥ Capital 228,300 million yen 300 million yen
⑦ Shares Issued 1,667,121,942 (excluding 2,548 shares of reacquired stock) 6,000
⑧ Fiscal Term March 31 March 31
⑨ Major Stockholders and Ownership Ratios Innovation Network Corporation of Japan: 69.15%
Japan Trustee Services Bank, Ltd.: 8.11%
Hitachi, Ltd.: 7.66%
Mitsubishi Electric Corporation: 6.26%
Renesas Electronics Corporation: 100%
Financial condition and business performance in immediately preceding fiscal year (fiscal year ended March 31, 2014)
  Net Assets 227,314 million yen 1,719 million yen
Total Assets 786,002 million yen 4,737 million yen
Net Assets per Share 128.73 yen 286,455.49 yen
Net Sales 833,011 million yen 12,685 million yen
Operating Income (Loss) 67,635 million yen 128 million yen
Ordinary Income (Loss) 58,625 million yen 141 million yen
Net Income (Loss) −5,291 million yen −66 million yen
Net Income (Loss) per Share −5.07 yen −11,008.41 yen
 

2-3-3. Overview of the business to be separated

 

2-3-3-1. Business activities of the business to be separated

Kit, platform and system solutions development functions, sales promotion infrastructure development and web content creation, and training, and education functions.

 

2-3-3-2. Financial results of the business to be separated

The business to be separated is a development and education unit which does not generate any sales directly from outside the company, thereby there is no information to report.

 

2-3-3-3. Assets and liabilities to be succeeded by Renesas Electronics

Total assets: 199 million yen (planned)

Total liabilities: 199 million yen (planned)

 

2-4. Absorption-type merger of subsidiaries and change of company name of surviving subsidiary

Effective April 1, 2015, an absorption-type merger will be implemented with Renesas Solutions as the surviving company and Renesas System Design as the absorbed company. Alongside this merger, plans call for the company name of Renesas Solutions to be changed to Renesas System Design Co., Ltd., effective the same day.

 

2-4-1. Summary of merger

 

2-4-1-1. Schedule of merger

① Conclusion of merger agreement

January 28, 2015

② Approval of merger by general meeting of shareholders

March 19, 2015 (planned)

③ Effective date of merger

April 1, 2015 (planned)

 

2-4-1-2. Method of merger

Absorption-type merger with Renesas Solutions as surviving company and Renesas System Design as absorbed company

 

2-4-1-3. Ownership ratio following merger

Since Renesas Solutions and Renesas System Design are wholly-owned subsidiaries of Renesas Electronics, there is no need to determine an ownership ratio. In addition, neither party to the merger has issued share subscription rights or bonds with share subscription rights, and no merger subsidies will be paid.

2-4-2. Overview of parties to merger

  Surviving Company Absorbed Company
① Company Name Renesas Solutions Corporation Renesas System Design Co., Ltd.
② Address Nippon Building, 2-6-2 Ote-machi, Chiyoda-ku, Tokyo 100-0004 3-1 Kinkocho Kanagawa-Ku Yokohama, Kanagawa 221-0056
③ Representative Shinji Suda, President (part-time) Tatsuya Nishihara, President
④ Major Operations 1. Operations related to applied semiconductor technology
  • (1) Development of total solutions
  • (2) Technical support activities
  • (3) Provision of systems business
2. Development, design, and production of software development tools
3. Technical training, Web information services
Devices and solutions business
  • Development of MCU and SoC chips
  • Development of analog devices and mixed signal chips
  • Development of power semiconductor devices
  • Development related to memory, IP cores, and fundamental technology
  • Development of tools, development of software, customer support, etc.
⑤ Capital 300 million yen 400 million yen
⑥ Established April 2, 2001 May 23, 1980
⑦ Shares Issued 6,000 800,000
⑧ Fiscal Term March 31 March 31
⑨ Major Stockholder and Ownership Ratio Renesas Electronics Corporation: 100% Renesas Electronics Corporation: 100%

2-4-3. Status following merger

① Company Name Renesas System Design Co., Ltd.
② Major Operations (1) Development, design, manufacture, sale and other of semiconductor elements, electronic components and product applications such as integrated circuits, etc.
(2) Development, design, manufacture, sale and other of software and development tools related to electrical equipment, electronic equipment, and communication equipment as well as components parts for such equipment and product applications employing such equipment
(3) Maintenance and consulting related to the above
(4) All operations ancillary or related to the above
③ Head Office Address 5-20-1, Josuihon-cho, Kodaira-shi, Tokyo 187-8588
④ Representative Tatsuya Nishihara (planned), President
⑤ Capital 300 million yen
⑥ Fiscal Term March 31

Note: Plans call for the company name of Renesas Solutions Corporation to be changed to Renesas System Design Co., Ltd., effective April 1, 2015.

3. Status of Renesas Electronics following structural reorganization

There will be no changes to the company name, major operations, head office address, representatives, capital, or fiscal term of Renesas Electronics due to the corporate separations and merger.

 

4. Effect on business performance

The impact of the reorganization on the consolidated performance of the Renesas Electronics will be minimal.

About Renesas Electronics Corporation

Renesas Electronics Corporation (TSE: 6723) delivers trusted embedded design innovation with complete semiconductor solutions that enable billions of connected, intelligent devices to enhance the way people work and live. A global leader in microcontrollers, analog, power, and SoC products, Renesas provides comprehensive solutions for a broad range of automotive, industrial, home electronics, office automation, and information communication technology applications that help shape a limitless future. Learn more at renesas.com.


The content in the press release, including, but not limited to, product prices and specifications, is based on the information as of the date indicated on the document, but may be subject to change without prior notice.